SAN FRANCISCO - A granite historical marker installed in San Francisco's seedy Tenderloin District this week would be unremarkable if it didn't honor men who dressed in women's clothes and once walked the streets selling sex.

The tired travestites who clashed with police at an all-night greasy spoon here in 1966 never would have expected the city's political elite to show up for a dedication ceremony honoring their struggle as a civil rights milestone.

Yet there, at the site of the Compton's Cafeteria riot, among a crowd of unusually tall women and noticeably short men were a pair of city supervisors, the district attorney, the police chief, and a transsexual police sargeant. The California Assembly and the mayor sent proclamations

"Trans has become part of polite society," said Susan Stryker, the local historian and transgender activist who spent nine years uncovering the Compton's Cafeteria saga and making it into a documentary called "Screaming Queens." "You can't be openly anti-trans the way you could before."

Until Stryker teased it out, the story of the Compton's Cafeteria riot remained as hidden as its main characters' true identities and carefully concealed razor stubble. Now the event is quietly challenging New York's 1969 Stonewall Riots as the dawn of the modern gay rights era.

Thursday's event reflects the mainstream's growing awareness, if not acceptance, of people who identify as "transgender." The umbrella term, which came into common usage a decade ago, covers cross-dressers, transsexuals and others whose outward appearance doesn't match their gender at birth.

While not every city is ready to celebrate the contributions of its cross-dressing citizens, San Francisco - which in 2001 extended its health insurance to cover sex reassignment surgeries for municipal employees - is no longer alone in left field. Across the nation, one of America's most maligned minority groups is quickly winning rights and recognition it began to demand only recently.

In the last two years alone, New Mexico, Illinois and California have updated their anti-discrimination laws to protect transgender home buyers and renters; colleges in Vermont and Iowa have dedicated "gender neutral" dorm rooms; and corporations have adopted policies for helping employees stay on the job during sex changes.

"When we are getting phone calls from people who have lost their jobs, and e-mails from people who are facing violence, it's sometimes easy to think everything is still really bad," said Mara Keisling, executive director of the National Center for Transgender Equality in Washington, D.C.

"But to see that people were able to stand up for themselves 40 years ago is a very wonderful reminder to us of how far we've come."

The change is especially obvious this month as U.S. cities observe gay pride events. Although so-called "drag queens" have been a visible part of pride marches since the 1970s, gay and lesbian groups were long afraid to embrace transgender causes for fear of being tainted by the more extreme prejudice they provoked, said Matt Foreman, executive director of the National Gay and Lesbian Task Force.

"There was a time when nobody wanted to even mention transgender issues or have transgender people accompany you on lobbying visits to members of your state assembly because that was pushing the envelope too far," Foreman said. "There was a myth in our community, and frankly I was part of that myth, that including transgender people would set our cause back."

But gender identity still raises thorny questions for gay activists. For example, should women who were born as men be admitted to lesbian music festivals? But the annual pride party has become much more transgender inclusive, Keisling said.

This month, transgender people were chosen as grand marshals for pride parades in Albuquerque and Seattle, while Boston and Houston joined New York, Los Angeles and San Francisco in making trans-specific entertainment part of the official pride festivities.

"The history of transgender civil rights and Pride was that it was OK as long as it was gay men in dresses and it was about spectacle," said Chris Daley, director of the National Transgender Law Center in San Francisco. "The shift we are seeing is that the broader LGBT community has been able to embrace not only the more comfortable parts of the community, but everybody."

Observing the range of lawyers, entertainers and openly transgender professionals who were on hand as the sidewalk plaque marking the Compton's Cafeteria riot was installed, Stryker was struck by how much had changed in the last 40 years.

"Back then, you couldn't be out as trans without huge costs," she said. "To see all these people honoring a bunch of drag queens who rioted against the cops is amazing."